Kumar Arch Tech, a leading PVC blend-based building materials manufacturer, has filed draft papers with SEBI to raise Rs 740 crore through an initial public offering (IPO). The IPO will consist of a fresh issue of shares worth Rs 240 crore and an offer-for-sale of shares worth Rs 500 crore by promoters, as per the documents submitted on September 27.
The Rajasthan-based company, which operates under the ECHON brand, is also considering a pre-IPO placement of Rs 48 crore. If successful, this will reduce the fresh issue size. Kumar Arch Tech holds an 18 percent market share in India as of March 2024 and boasts the largest production capacity in the PVC2 blend-based building materials segment with an annual capacity of 27,600 MTPA.
Further expansion is in process with a greenfield project at Udaipur, adding 90,000 MTPA, and a manufacturing plant has been acquired in Virginia, USA. Products include boards, mouldings, wall, and ceiling panels for residential, commercial, and industrial segments. The company’s exports to the US comprise 28% of India’s total PVC blend-based building materials in FY24.
Some of its listed peers with which Kumar Arch Tech will be competing include Greenply Industries, Century Plyboards and Astral. The company plans to utilise Rs 182 crore from the IPO proceeds towards financing the greenfield project through its subsidiary, Taylias Industry, and the balance amount for general corporate purposes.
During the period under review, the company has reported its net profit soar 76 percent to Rs 110.8 crore despite flat operating topline growth a revenue growth of just 0.15 percent at Rs 407.9 crore. EBITDA soared 68.5 percent to Rs 139.2 crore with margins surging by a whopping 1,380 bps at 34.1 percent.
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Source: Moneycontrol
News Desk
